Therefore, negotiation, signing and implementation of Vietnam-Israel Free Trade Agreement (VIFTA) is a favorable prerequisite for Vietnam to promote export of its strong products to Israel; at the same time, it provides an opportunity to access high-tech products from Israel, contributing to reducing production and business costs and enhancing the competitiveness of domestic goods.
Initiated on December 2, 2015, and after eight years of negotiations with a total of 12 official negotiating sessions, VIFTA Agreement concluded on April 2, 2023. Based on Government Resolution No.110/NQ-CP dated July 21, 2023 and authorization of the Prime Minister, Minister of Industry and Trade Nguyen Hong Dien signed the Agreement with the authorized representative of Israel on July 25, 2023, in Israel.
This is the first FTA between a Southeast Asian country and Israel, and the 16th FTA between Vietnam and global partners. The signing of the FTA between Vietnam and Israel marks the culmination of the tireless efforts of both countries.
VIFTA is a comprehensive agreement covering many areas of mutual interest to Vietnam and Israel, such as trade in goods, services and investment, rules of origin, sanitary and phytosanitary measures, customs, and government procurement.
With agreements reached in all chapters of the agreement, especially strong commitment of both sides to increase rate of trade liberalization—with Israel's overall liberalization rate at the end of commitment period reaching 92.7% of tariff lines and Vietnam's reaching 85.8% - both sides expect bilateral trade to grow significantly, soon reaching US$3 billion and even higher in the future.
Investment Liberalization Obligations in the VIFTA Agreement
Regarding investment liberalization obligations in VIFTA Agreement, Multilateral Trade Policy Department of Ministry of Industry and Trade stated that, for the investment chapter, VIFTA Agreement includes basic commitments similar to other FTAs that Vietnam participates in, including the principles of National Treatment (NT), Most Favored Nation (MFN), and Implementation Requirements (PR)...
In essence, the investment liberalization commitments include obligations related to: National Treatment (NT), Most Favored Nation (MFN), and Implementation Requirements (PR), as well as Senior Management and Board of Directors (SMBD).
Overall, VIFTA Agreement is a Free Trade Agreement (FTA) with medium-level commitments, meaning a higher level than the WTO and some other traditional FTAs that Vietnam participates in.
However, compared to new-generation FTAs such as CPTPP, EVFTA and UKVFTA, the VIFTA still has some differences in its investment liberalization obligations. Specifically:
Firstly, regarding national treatment obligations, Clause 9.4 of the VIFTA stipulates:
Each Party shall accord to investors of the other Party treatment no less favorable than the treatment it accords to its own investors, under similar circumstances, with respect to the establishment, acquisition, expansion, management, maintenance, use, enjoyment or disposal of investments in its territory.
Each Party shall accord to investments protected under this agreement treatment no less favorable than the treatment it accords to its own investors' investments in its territory, under similar circumstances, with respect to the establishment, acquisition, expansion, management, maintenance, use, enjoyment, or disposal of investments in its territory.
This approach is similar to that of the CPTPP Agreement, which also uses the "under similar circumstances" approach. This is a broader approach compared to the GATS Agreement in the WTO or some other FTAs that use the traditional method of using "similar services and service providers".
Secondly, regarding the Most Favored Nation (MFN) obligation, Article 9.5 of the VIFTA Agreement stipulates:
Each Party shall accord to investors of the other Party treatment no less favorable than that accorded to investors of non-signatory parties, under similar conditions, with respect to the establishment, acquisition, expansion, management, maintenance, use, enjoyment or disposal of investments in its territory.
Each Party shall accord to investments protected under this Agreement treatment no less favorable than that accorded to investments of non-Contracting Parties within its territory, under similar conditions, with respect to the establishment, acquisition, expansion, management, maintenance, use, enjoyment, or disposal of such investments within its territory.
This provision does not include definitions or any procedures or mechanisms for resolving disputes between the State and investors, including similar mechanisms and procedures as stipulated in Section D (Dispute Resolution between the State and Investors).
This approach is similar to that of the CPTPP Agreement, which also uses the "under similar circumstances" approach.
This is a broader approach compared to the GATS Agreement within the WTO or some other FTAs that use the traditional method of "similar services and service providers". Thirdly, regarding the obligation to enforce, Article 9.6 stipulates that neither party may, in relation to the establishment, acquisition, expansion, management, maintenance, use, enjoyment, or disposal of investments in its territory by investors of another party, impose or enforce any requirement, or enforce any commitment or guarantee.
Commitment to enforce requirements in VIFTA Agreement is arguably similar to that in other FTAs such as the CPTPP or EVFTA.
The fact that VIFTA Agreement includes comprehensive investment commitments, from National Treatment and Most Favored Nation Treatment to high-level enforcement and management requirements, brings many positive benefits to Vietnam.
These commitments contribute to enhancing the transparency, stability, and predictability of the investment environment, thereby building confidence among foreign investors. This gives Vietnam the opportunity to attract more high-quality investment capital from Israel – a country with strengths in technology, innovation, and smart agriculture.
Accessing advanced international standards and practices in the investment sector will also help Vietnam improve its institutions, enhance its management capacity and promote deeper integration into global economy.

Source: Vitic/ congthuong.vn